In Season 2, Seacrest surfaced as the lone host. Dunkleman reportedly hated working on the show and the studio was dissatisfied with his performance. Kristin Holt was a special correspondent. This time, Ruben Studdard emerged as the winner with Clay Aiken as a very close runner-up. Out of 24 million votes recorded, Studdard finished just 130,000 votes ahead of Aiken. The accuracy of the reported results is still disputed. There was much discussion in the communication industry about the phone system being overloaded, and that more than 150 million votes were dropped, making the voting suspect. Since then, the voting methods have been modified to avoid this problem.

In an interview prior to the start of the fifth season, executive producer Nigel Lythgoe revealed for the first time that Aiken had led the fan voting from the wild card week onward until the finale. Clay Aiken became the first American Idol non-winning contestant to have a U.S. Hot 100 number-one with "This Is the Night", written by British songwriter Chris Braide with Gary Burr and Aldo Nova. Studdard and Aiken both released albums in the fall of 2006. Kimberley Locke has also enjoyed radio success after American Idol with her debut album, One Love. Her second album, Based on a True Story, was released in May 2007.

Fourth-place finisher and former Marine Josh Gracin has had huge success as a country artist. His first album spawned three hit singles, including the number-one U.S. country song, "Nothing to Lose". He is signed with Lyric Street Records.

Sixth-place finisher Carmen Rasmusen signed with independent country record label Lofton Creek Records and her first single "Nothin' Like the Summer" is having a good rendition on American radios.

One contestant, Frenchie Davis, was disqualified and removed from the competition after topless photos of her surfaced on the Internet. She later appeared in the Broadway musical Rent.

During the course of the contest Studdard became known for wearing 205 Flava jerseys representing his area code. Shortly after the end of the contest, Studdard sued 205 Flava, Inc. for $2 million for using his image for promotional purposes. Flava responded by alleging that Studdard had accepted over $10,000 in return for wearing 205 shirts, and produced 8 cashed checks to validate their claim. The allegations, if true, indicate a clear violation of the American Idol rules. The lawsuit was settled out of court.

The rumor mills were buzzing once again in 2005 when Season 2 contestant Corey Clark, who the producers say was kicked off the show because of a police record he had not disclosed earlier, alleged that he had an affair with judge Paula Abdul during his time on the competition and that's the reason he was kicked off. Clark also alleged that Abdul gave him preferential treatment on the show because of their alleged romance. A subsequent investigation by an independent council hired by Fox "could not corroborate the evidence or allegations provided by Mr. Clark or any witnesses".

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